Chapter 13 Paying Via The Net
Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment
Digital Payment Requirements Acceptability Anonymity: privacy & untraceability Convertibility Efficiency Flexibility Integration Availability
Digital Payment Requirements Reliability Scalability Security Integrity Authentication Usability
Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment
Fraud Detection Methods Products
Methods Checksum for credit card no. Verify the credit card no. and expiration date with card issuer Check postal address with online services Confirmation with address Digital certificates for non-repudiation Predefined purchase limits each time and per week
Methods Confirmation web page for terms and conditions Data base with credit card no., address, and phone no. Document the complete online transactions Trustworthy logistics partner Unique key for online shipping digital merchandise
Methods Business rules for checking suspicious orders and credit card no.
Products Fraud Shield by ClearCommerce Visa
Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment
Online Payment Methods Pre-paid –Electronic cash systems –Smart cards Instant-paid –Debit cards Post-paid –Credit cards –Invoices –Internet cheques –Cash on delivery
Electronic cash systems Saving digital money to the hard disk or floppy disk Pros & cons –Anonymity –Security with encryption and digital signature –Splitting value –Internet usage only –Easy to lose –No anonymity with physical delivery –No open standard
Electronic cash systems Products –DigiCash –NetCash –CyberCoins –IBM micro payment –MilliCent
Smart Card Embedded chips with encrypted digital money Pros and cons –Use password to ensure the security –Cyber and real usage –Low transaction cost –No open standard
Smart Card Types –Health Care –Phone –Debit Products –Mondex –VisaCash
Instant-paid Debit cards Pros and cons –Access to bank’s database –Less fraud & error –High security –Complicated –Need hardware & software –Signature through fax –High communication costs
Instant-paid Product –Direct Debit
Credit Cards Four players: customer, merchant, issuer and acquirer Pros & cons –International –Low security –High transaction cost –Fraud
Credit Cards Security standards Secure Socket Layer (SSL) –By Netscape –Encrypt traffic between the web browser and web server Secure Electronic Transaction (SET) –By Visa and MasterCard –Public key encryption using digital certificates for both buyer and seller
Credit Cards Security standards SET features –High security –Low visibility –Standards –Non-repudiation Chip-secured Secure Electronic Transaction C- SET –Use chip card for any network devices –Reduce cost and complexity for merchant
Invoices Business-to-business Usage reasons –High volume transaction –No need to reorganize the old process –Low transaction fee
Internet Cheques Electronic cheques Pros and cons –Require payer’s digital signature –Special software & network –Less manual steps Systems –echeck by US Department of the Treasury
Cash on Delivery (COD) Pros and cons –Require logistics party –More expensive –Extra cost paid by customer
Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment
Online Payment Types Micro payments –Less than $5 –Electronic cash transaction Consumer payments –Between &5 and $500 –Credit card transactions Business payments –Over $500 –Direct debit or invoice transaction
Agenda Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment
Projects –Secure Electronic Marketplace for Europe (SEMPER) –The Open Trading Protocol (OTP) –Open Buying on the Internet –Global Trust Enterprise Goal –Internet payment infrastructure to achieve the digital payment requirements
Points to Remember Digital Payment Requirements Fraud Detection Online Payment Methods Online Payment Types The Future Payment